http://keithhennessey.com/2009/08/05/what-is-reconciliation/Crash course on reconciliation
Reconciliation is a fast-track legislative process that allows a bill to pass the Senate in a limited time period, and with the support of only 51 Senators. A “normal” Senate bill can be slowed down by a single Senator, and blocked by 41 Senators. This is not true for a reconciliation bill.
The downside is that reconciliation “protections” apply only to a very narrow set of policy matters, all relating to changes in taxes, spending, or debt.
In the particular case of health care reform, some Senate Democrats are attracted to the reconciliation process because it would allow them to pass a bill even if there is unified Republican opposition, and even if as many as 9 Senate Democrats oppose the bill. It is, however, nowhere nearly as easy as these advocates might hope. They may be able to enact some parts of health care reform but not others.
Much more at the link to help in understanding what Reconciliation actually is.
The second post: "How reconciliation might be used for health care reform":
http://keithhennessey.com/2009/08/05/reconciliation-part-2/There is much at the link, but here is an important part about the Byrd rule:
Here are the three most important parts of the Byrd rule:
1. If a provision has no effect on spending or revenues, then it’s extraneous and violates the Byrd rule…
2. … unless it is a necessary term or condition of another provision that does affect spending or revenues.
3. If a provision has a small budget effect that is merely incidental to its broader non-budgetary policy effect, then it is extraneous and violates the Byrd rule.
Looking at the provisions of a likely reconciliation bill, here are my preliminary judgments. The ultimate arbiter is the Senate Parliamentarian. “OK” means that I think it doesn’t violate the Byrd rule, not that I think it’s good policy.
* Medicaid expansions – The spending is clearly OK. Some of the detail changes within the Medicaid expansion are not.
* New health insurance “exchange” subsidies – OK. Same as for Medicaid. Lots of the non-spending related details could violate the Byrd rule.
* Tax increases – OK.
* Individual & employer mandates – OK. They’re basically taxes with conditions.
* Small business tax credits – OK
Here are provisions that I think violate the Byrd rule:
* Exchanges / Gateways, and all the requirements imposed through them – They’re separated from the subsidies. Someone might argue that the exchanges are a “necessary term and condition” of making the subsidies work. That’s a huge stretch.
* So-called health insurance consumer protections – Insurance mandates such as those requiring guaranteed issue and guaranteed renewability, no lifetime or annual limits, extension of coverage to 25-year old dependents, and modified community rating – As I wrote yesterday, I think these clearly violate the Byrd rule. A couple of friends pointed out that these provisions would make health insurance more expensive. That depresses wages, which reduces income tax revenues, which is a budgetary effect. I think this fits in the merely incidental bucket – these provisions would fundamentally restructure the insurance industry with a minor budget effect.
* The public option – As currently drafted, it’s designed to be independent of federal spending. If so, it’s extraneous. I imagine they could redraft it to link it more closely to the spending so it doesn’t violate the Byrd rule.
An additional post about reconciliation: "Doing health care through reconciliation is even harder than I thought":
http://keithhennessey.com/2009/08/06/even-harder/Yesterday’s Byrd rule examples would allow a bill to pass the Senate, but with major parts possibly excised. A smart friend wrote that while Senator Reid may not be able to get the whole car through reconciliation, he could probably get the chassis, wheels, and engine. He could then come back in separate future bills to add things like seats, steering, and brakes.
And two smart friends wrote to tell me they think that clever Senate Democratic staff can draft around some of the Byrd rule problems I raised. They have convinced me that the public option can be drafted so that it is not vulnerable to the Byrd rule test I described yesterday. I still think the “health insurance consumer protections” are vulnerable. I received mixed views on the individual and employer mandates from a few experts.
But I missed the most important point. I was so focused on provisions that would not affect the budget and might therefore have to be removed, that I forgot to think about provisions that would affect the budget.
You will remember from the past two days that the reason Senator Reid might decide to use reconciliation is that he would then need only 51 votes to pass a bill through the Senate. If he cannot build a 60-vote coalition, either with Republicans or among his 60 Democrats, then he may feel his best option is to try a 51-vote strategy. Reconciliation is the only way he can do that.
If any rules place 60-vote requirements on a reconciliation bill, they seriously foul up that strategy. Yesterday I explained why certain non-budgetary provisions would violate the Byrd rule because they don’t affect the budget. If Senator Reid has 51-59 Senators in his coalition, then those provisions will drop out.
He adds:
I missed that there are two other 60-vote requirements that are triggered by the spending in such a bill.
* There is another prong of the Byrd rule test, which in our case says in effect that if the reconciliation bill increases the budget deficit in any year after 2014, then the spending parts of the bill can be removed unless there are 60 votes to waive the Byrd rule.
* There is a separate Senate point of order against legislation that increases long-term budget deficits. If CBO says that this bill increases the budget deficit by more than $5 B for any of the following periods: 2020-2029, 2030-2039, 2040-2049, or 2050-2059, then the bill dies unless there are 60 votes to waive this point of order.
So imagine that Senator Reid has had clever staff redraft the Senate HELP Committee and Senate Finance Committee language to avoid most of the Byrd rule problems I described yesterday. Assume that he knows from the Senate parliamentarian that, while he will lose some components of the bill if he cannot get 60 votes to defend them, with 51 votes he’ll be able to pass most of the bill.
But then along comes Senator Loper, who is deeply concerned about the fiscal impact that long-term budget deficits will have on her three children. She raises the long-term budget point of order against the reconciliation bill. Assume she has an estimate from CBO which shows that the bill increases budget deficits by more than $5 B in the period 2020-2029. It might look like this key quote from CBO’s analysis of the House Tri-Committee bill, H.R. 3200:
In sum, relative to current law, the proposal would probably generate substantial increases in federal budget deficits during the decade beyond the current 10-year budget window.
If Senator Reid cannot find 60 votes to waive that point of order, the entire bill dies.
Again, much more at the link. The bottom line is that this is not as simple a process as many here might believe and Reid may not be the moron that so many here believe him to be. The trouble here at DU is that people often think they know more than they really do when they are not privy to all of the details and facts of the situation.
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